What is Term Life Insurance, and How Much Does It Cost?
Term life insurance refers to the term of the policy or how long it covers you. Usually, some policies cover you until you are 60 years of age. Some insurance plans offer coverage for 70 and above. To gain a better understanding of term insurance, there are two terms you need to know: decreasing and level term insurance.
Decreasing Term Life Insurance
If you have this policy, the amount of coverage decreases over time. Most policyholders use it to cover a debt that lessens over a given term—for instance, a repayment mortgage. If you have a decreasing life term insurance, your premiums will also go down over time. After all, less coverage means reduced payments. You can expect the same with the yearly payouts. The longer the policy runs, the smaller the payout.
Level Term Life Insurance
This policy runs for a fixed term. You get coverage for five, ten, twenty, or twenty years. You only get the payout if you die during the time you are covered by the policy or while the policy is still active. If you want to look after the needs of your family and make sure that they will receive a fixed lump sum of money in case of your death, this is an excellent policy to choose. Because it provides a fixed sum of money, the premiums are higher. When you shop for insurance products, you’ll find that not many companies offer life insurance for seniors over 70. Most term life insurance plans cover you while you are in your prime. In case of an accident, you’ll be covered, and your family will receive a lump sum of cash. But once the term finishes, you’ll need to consider finding another insurance plan, one that covers you throughout your golden years.
How Much is Life Term Insurance?
Life insurance can start with monthly premiums of $224 for men and $189 for women at the age of thirty. That rate is based on a $500,000 life insurance policy for 20 years targeted at preferred applicants.
What Affects Life Insurance Rates?
Several factors affect life insurance rates. These include:
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Your age. The younger you start paying insurance, the lower your premiums are, but the higher the payout is.
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Your gender. Women live longer than men, so premiums are often lower for women.
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Your smoking status. If you smoke, you have a high risk of developing health problems and complications. Life insurance tends to be pricey for smokers.
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Your health. If you have pre-existing conditions, your insurance plans are likely to be expensive. Insurers will consider your weight and height when they suggest a plan for you.
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Your family’s medical history. Is there someone in your family who died from cancer? Do you have heart diseases or diabetes in your family?
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Your driving records. A poor driving record or a major traffic accident will mean a more expensive insurance plan. Your insurer will charge higher rates.
Your work and lifestyle. If your job puts you in risky or dangerous situations, your premiums will be higher.
